June 9, 2014 / 9:32 AM / in 4 years

ASIA CREDIT CLOSE: Most bonds trade up on strong sentiment

SINGAPORE, June 9 (IFR) - The rally in secondary trading carried over today from last Friday on the back of ECB’s rate cuts and better-than-expected US non-farm payroll data.

“With the ECB and NFP behind us, the event calendar seems clear for the near future, which paves way for continued (deal) flow and tightening spreads,” a Singapore-based trader said. “Also new supply is expected to be mild, which means strong buying is likely to continue.”

Investment-grade credits were, generally, 1bp-4bp tighter, with the bonds of Chinese SOEs and Indian issuers outperforming. Sinopec bonds, however, were little changed after the announcement this morning of the reopening of its three-tranche bond for taps.

The sovereign segment also saw plenty of activity today, with focus on Indonesia and Pertamina. Both credits rallied about a point each at the long-end with Indonesia’s 2044s quoted at 118.625/118.875 and Pertamina’s 2044s at 101.5/101.75. Quasi-sovereign PGN’s 2019s also rose to 100.75/101, close to the record high.

In contrast, the Republic of Korea’s USD1bn 30-year bonds saw some profit taking today with the spread widening 5bp to 56bp-54bp. The paper was selling like gold since it priced last Tuesday and investors are now reaping some profits, according a Singapore-based trader.

In the high-yield segment, Chinese property bonds were up about half to 1 point on improved sentiment.

Kaisa bonds were largely unaffected by the consent solicitation announced this morning, traders said. “The consent solicitation is not alarming and is, therefore, considered neutral,” a Hong Kong-based trader said.

Shui On’s 2019s, priced last week, edged up slightly to bid-100.5 on rising buying interest. Evergrande Real Estate Group also saw its 2018s marked higher on the back of the news that Alibaba is buying half of its soccer club, Guangzhou Evergrande, for USD192m.


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